EXPE - Spring Break Is Back

• Hotel REITs - one of just three property sectors in positive-territory this year - entered 2022 with positive fundamental momentum and reasons for cautious optimism following four-straight years of underperformance.
• Spring Break is back - for some, at least. Sunbelt and leisure-focused markets continue to substantially outperform Coastal business-focused markets. Leisure travel is above pre-pandemic levels, but business demand remains depressed.
• For the tourism industry, "two weeks to slow the spread" became two long years of operational struggles. Just as COVID headwinds faded, soaring energy prices and inflation have become new risk factors.
• Wanna Get Away? Recent high-frequency data has been encouraging, contrasting with the gloomy attitude in confidence surveys. TSA Checkpoint data rebounded to 90% of pre-pandemic levels last week while average national hotel occupancy is back at its 20-year average.
• Rising fuel prices and geopolitical tensions are having the effect of pushing the demand mix from international trips towards North American destinations, but with risks still looming, selectivity within the sector remains essential.

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